"The core of the conflict is not territory which was liberated or occupied or taken in ’67," the defense minister said. "The conflict started early on since the dawn of Zionism, and unfortunately I don’t see a leadership on the Palestinian side that is ready to say that if we reach a compromise on territory it would be the end of claims."
Ya'alon told the audience that he favored negotiations with the Palestinians, though he was not ready to discuss an Israeli pullback from "an inch" of the West Bank as long as the government of Mahmoud Abbas was not willing to recognize Israel as the nation-state of the Jewish people.
"I support the negotiations, I support any political engagement, but we should tell the truth to ourselves and not delude ourselves and to deceive ourselves regarding Abu Mazen’s intentions," Ya'alon said, referring to Abbas by his nom de guerre.
"Will Abu Mazen be ready to recognize our right to exist as nation state of the Jewish people?" Ya'alon asked. "We got a clear answer. Never."
The defense minister also rejected suggestions that Israel's settlement activity was a sign that the government was not sincere about negotiating an agreement with the Palestinians.
"Settlements are not the obstacle to peace," he said. "The settlements include today less than five percent of the territory in the Palestinian arena. If we are going for peace - we have Arabs living side by side with us in Galilee and Jaffa and Acre – we don’t deny this right. Why does the Palestinian leadership insist on getting the territory without Jews? If we have to live together, we can benefit from each other."
Ya'alon's comments came on the heels of a speech given by US Secretary of State John Kerry to the conference on Saturday in which he said of the Israeli-Palestinian conflict: "Today’s status quo, absolutely to a certainty, I promise you 100 percent, cannot be maintained. It is not sustainable. It is illusionary. You see for Israel there is an increasing delegitimization campaign that has been building up. People are very sensitive to it, there is talk of boycott and other kinds of things. Are we all going to be better with all of that?”
Kerry's comments drew criticism from the Israeli Right, including Economy Minister Naftali Bennett, who said, “We expect our friends in the world to stand by our side against anti-Semitic boycott efforts against Israel, and not be their trumpet.”
Ya'alon has been critical of Kerry's efforts to push forward Israeli-Palestinian peace efforts in the past, reportedly saying last month that the US secretary of state is "naive," and "messianic."
Meretz MK Nitzan Horowitz (Meretz) was critical of Ya'alon's pessimistic attitude toward the peace process following his speech on Sunday.
"Israel can get by without Ya'alon," Horowitz said. "After he sabotaged relations with the US, the Defense Minister is continuing to harm Israeli interests. A peace treaty will ensure Israel's future as a Jewish and democratic state and its social and economic growth. If Ya'alon doesn't understand that, he is not worthy to continue in his position, and we will be better off without him."
Lahav Harkov contributed to this report.